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Question 7: Old Lady in a Shoe Inc. has two Support Departments (Engineering and Materials Management) and two Operating Departments (Machining and Assembly), which has
Question 7: Old Lady in a Shoe Inc. has two Support Departments (Engineering and Materials Management) and two Operating Departments (Machining and Assembly), which has this information about costs before they are allocated: Operating Departments Machining $350,000 Support Departments Materials Mgt. Total Engineering $480,000 Assembly $540,000 $720,000 $209,000 Budgeted Costs: Support Furnished By Engineering $27,000 $150,000 $60,000 $63,000 Salaries Percentage 40% 42% 18% By Materials Mgt. Budgeted Labor Hrs 3,150 hrs 800 hrs 1,050 hrs 5,000 hrs Percentage 16% 21% 63% Old Lady in a Shoe Inc. allocates Engineering costs first, and then Materials Management costs. With this information please find: The total cost of machining if support costs are allocated using the direct method: a. b. The total cost of assembly if support costs are allocated using the direct method: c. The total cost of machining if support costs are allocated using the step down method: d. The total cost of assembly if support costs are allocated using the step down method
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